The South African Competition Court has unconditionally approved the merger of Bonitas Medical Fund (Bonitas) and Nedgroup Medical Aid Scheme (NMAS), which will take effect from January 2022.
Product offerings for each scheme will remain unchanged for the rest of the year, however NMAS members will be officially migrated to Bonitas starting in January of next year.
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“The merger will ensure that NMAS members become part of a large and sustainable medical plan and further strengthen Bonitas’ role as a leader in the healthcare market,” said Lee Callakoppen, Bonitas Principal Director.
“In recent years, various developments in the healthcare industry have led to a series of consolidations and mergers between schemes, a trend that is expected to continue. As a key player in the industry, with a wide range of options designed to meet the needs of South Africans, Bonitas is positioned as the ideal partner for the merger. ”
The merger comes after NMAS ‘boards of directors commissioned preliminary investigations into a potential consolidation opportunity through an independent actuary earlier this year.
The positive results of the first feasibility studies provided adequate motivation, which then prompted the NMAS board to pursue a merger process.
“NMAS has more than 47,000 beneficiaries and the membership is encouraging. The benefits of the merger are numerous. [and] Bonitas is the second largest open healthcare in South Africa with financial indicators above statutory requirements and the industry average, ”said Callakoppen.
“The scheme has one of the highest credit ratings in the industry, which is synonymous with high capacity and stability for the payment of claims, which in turn guarantees members’ access to quality healthcare.”
As part of the regulatory requirements, the merger process was subject to consultation by members, who then voted in favor at the scheme’s annual general meeting held on August 18.
According to the schemes, the meeting was followed by ratification by the Competition Commission, as well as approval by the Council for Medical Schemes (CMS) to ensure due diligence was provided to all regulatory processes.
“The recently merged scheme will have a broader national presence and better economies of scale to negotiate favorable rates and improve provider networks. Bonitas’ strong financial stability and predictable claims history should also translate into more value for new members of the scheme, ”added Callakoppen.
“The boards of directors of NMAS and Bonitas entered these merger negotiations with the best interests of our members in mind. We believe that this merger will be an advantage and a benefit for them. ”
Bonitas is an open medical plan, while NMAS operates as a closed medical plan with its membership restricted to employees and retirees of Nedbank and Old Mutual Insure.
Palesa Mofokeng is a Moneyweb intern.